Poor poultry performance

Related tags Halal Profit Poultry

French meat processor Duc saw turnover slump by nearly 12 per cent in the first half of the year, as it felt the impact of competition from both cheaper and more expensive products.

Duc, the French meat processor, has reported operating losses of €1.9 million for the first half of 2003 as sales plummeted 11.6 per cent to €58.5 million.

The company said it had expected the decline in sales, which also pushed net results deeper into the red (from €0.9 million to €1.4 million) during the half.

"The market conditions are extremely difficult,"​ the company said in a statement. "Sales were hit by a decline in poultry consumption of 3.2 per cent since the start of the year, and falling prices only compounded the problem."

Duc said that its eponymous brand had suffered from increased competition from lower-priced products, as well as increased marketing activity for the quality-controlled Label Rouge products.

The decline in sales was also attributed to the decision to reduce turkey volumes in a bid to boost profitability.

But there were some reasons for optimism, with initial sales of the Prestige brand (Duc's answer to Label Rouge) to wholesale and catering customers showing promise. It has also launched a range of halal products for Muslims, again with some success.

Another new business stream is town centre rotisseries, which Duc said gave further impetus to its brand and offered significant potential for growth. Three outlets are already in operation, with a further three due to begin operating in the near future.

Although Duc stressed that its operating results were unchanged from the firstbhalf of 2002, it said that returning to profitability at the operating level was its top priority for the second half of the year. This would be achieved by improving gross margins and increased volumes, the company said.

"Investment and research into potential new opportunities in the primary processing sector will begin to bear fruit by the end of the year,"​ the company said, adding a number of new products were due for imminent launch.

Profits would also be further boosted by a number of planned agreements with foreign meat processors - such as the one signed this year with Ruby Rose Agricole in Ukraine - under which Duc​ sells its processing know-how to companies in emerging markets.

Related topics Meat

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